There's certainly no shortage of good software products available to start-ups these days.
But as our team spent more time as founders, operators, and advisors of early stage SaaS companies, we made two important observations:
We figured there had to be a better, more efficient way to launch an early stage subscription business. Here you'll find our story, why we decided to tackle this problem, and evidence that a platform solution is a better approach to building your subscription business.
During the course of idea validation interviews, we learned the following by interviewing founders of start-up SaaS businesses.
The 2020 study of SaaS trends published by Blissfully speaks to small companies now using 100+ SaaS solutions. These small businesses are most likely larger than the start-up founders or teams that we interviewed (the study defines a small business as having 1-100 employees), but this reinforces our findings. Worse yet, wasteful SaaS spending is nearly doubling year over year.
The buy-a-boat-load of software solutions trend is something that we also fell victim to. When Dimitris and I worked together at Buildium, I would often go to him with requests; "We need to buy a marketing automation platform," or "It's time to upgrade our help desk software." Sometimes Dimitris would oblige, but other times he would insist that we use very basic, homegrown tools. We were, after all, a bootstrapped start-up. In retrospect those homegrown tools served us very well—we used several of them until we reached well north of $5M in annual revenue. The point solutions that we bought more often than not came with unclear costs, significant integration and maintenance overhead, and a realization that we were actually using only about 20% of each tool's functionality.
As we reflected on this experience, we couldn't help but laugh; in an industry that celebrates Eric Ries' The Lean Start-up as gospel, why has the SaaS industry completely rejected "lean" principles when it comes to our software buying decisions?
As we considered the technology decisions we made at Buildium, we realized that those decisions were probably bigger than we thought they were at the time. Dimitris spent a lot of time integrating and maintaining point solutions. He spent a lot of time building other "scaffolding" that was needed to support the business, yet wasn't core to our product. We were often ping-ponging data between tools so we could deploy marketing campaigns to the exact segment of prospects or customers that we wanted to reach. And we were often surprised when our bills came in at month end.
What is the single most precious resource to start-up founders? Ask yourself this question, or anyone else, and you'll likely get one of three responses:
The most valuable asset a startup can buy is TIME. Everything always takes two times longer than you think.
The latter comment directly led us to develop Outseta's registration widget, which subscription start-ups can leverage to handle account registration, allow users to "pick their plan," and have the product check to make sure a user has a plan in place before giving them access to your product. Again, "scaffolding" that's necessary but not core product functionality.
We're on a mission to give small companies the technology tools they need, while saving critical technical founder time. All that hangs in the balance is your start-up's chances of success.